Today our Unity Technologies (U) put option contracted was purchased to close our position on the limit order I set yesterday after U recovered from its recent dive. U has been on a wild ride since we first sold the contract (strike: $105; expiration: 19MAR2021) on 5FEB2021. We sold the put contract on a day when U traded between $125-140 – down from nearly $160 earlier in the week. While we held the contract U traded as low as $86 but it closed around $109 today as we prepare for the option to expire this Friday.
A $75 premium to close a contract in the last week prior to expiration seems quite expensive but we still earned a return of 1.6% the $10,500 collateral required to cover the position. We narrowly missed the 15% threshold I aim to meet for our option positions but who knows where U will close on Friday.
Source: Questrade.com, 16MAR2021